Rainbow received 420,069 OP tokens on November 3rd 2022 to help bring users to Optimism. In our initial proposal, we requested 126,019 (30% of total grant) OP for round 1 and an additional 294,050 (remaining 70% of grant) OP if we surpassed Milestone 1: “$200,000 vol on Optimism or 500 bridges/trades per week.”
This post updates Optimism governance on how those tokens have been used and the results seen thus far. We plan to continue our analysis and deliver a follow up update to OP governance with our future plans to offer incentives.
Round 1 Usage of $OP & Results:
For Round 1 of Rainbow’s OP rewards, we looked to bring traders to Rainbow by specifically highlighting our Swap and Bridging features.
Our program centered around two incentives:
- An OP token rebate of 0.425% on Swaps and 0.125% on Bridges - to make transacting on Optimism the most affordable chain in Rainbow
- A Swap/ Bridging Leaderboard - to get traders’ attention and generate volume.
At the conclusion of round 1, Rainbow distributed 114,908.5 OP tokens over 3 weeks to 1,285 unique wallet addresses who swapped or bridged on Optimism in the Rainbow mobile app. There are 305,160.5 OP tokens remaining in our multisig.
The program was incredibly successful at boosting OP trading volume and moderately successful at getting traders to use Rainbow. The lasting impact of these results are encouraging and more users are now certainly aware of Rainbow’s swapping and bridging features.
Rainbow succeeded in driving high volumes to Optimism. The average daily volume on Optimism through Rainbow Router increased by 72,150% during the OP rewards program - from 2.2k per day (pre-incentives) to 1.59m per day (during incentives).
Since the rewards ended, Rainbow has continued to see higher volumes than before the incentive program. The average daily volume on Optimism through Rainbow Router has increased by 417%, from 2.2k per day (pre-incentives) to 11.37k per day (post-incentives).
Prior to the rewards program, Optimism represented only 9.67% of weekly transactions on Rainbow Router. In the two weeks after the rewards ended, Optimism has represented 18.6% of total transactions, a 94% gain.
Weekly active mobile app users with assets on Optimism increased by 200% during the promotion period and continue to increase even after the program ended. Although positive, we hope to see more widespread engagement in future rounds.
The program mostly appealed to high-wallet-value accounts and users who believed they could place on the leaderboard. Even with an OP token rebate that made Optimism the cheapest chain to use on Rainbow, we believe that regular users lacked clear actions to take on Optimism.
To make the program more appealing for everyday users, we want to guide users to take achievable actions within the Optimism ecosystem so they can earn incentives. In the next round, we are considering adding multipliers for connecting to partnered dapps as well as possible quests.
Swap volume was more than 30x higher than bridging volume even though they were both subsidized.
In general, we want to prioritize bridging to Optimism over Swaps to minimize wash trading and encourage more volume for the Optimism network.
About the participants:
- Total participating wallets (Dune): 1,285
- 52% iOS (558)
- 48% Android (515)
- 90.3% have NFTs (969)
- 51% have ENS names (547)
Existing Rainbow users: 581 (54%)
- 64.7% iOS (376)
- 35.3% Android (205)
- 98% have NFTs (569)
- 65.7% have ENS names (382)
- 88.8% opened the app since rewards ended (516)
- 56.3% swapped before rewards started (327)
- 25.8% swapped since rewards ended (199)
New Rainbow users: 492 (46%)
- 37% iOS (182)
- 63% Android (310)
- 81.3% have NFTs (400)
- 33.5% have ENS names (165)
- 60% opened the app since rewards ended (298)
- 15.8% swapped since rewards ended (78)
- Each week we allotted 28k tokens for transaction rebates, but not all of these rebates were used. The 11,110.5 OP tokens that weren’t utilized in round 1 will remain in the multisig. In total, there remain 305,160.5 un-utilized OP tokens in our multisig for future rounds.
- The most popular trades were in between stables — USDC, DAI, USDT.
OP Ether and OP tokens were the next most popular trades.
- ~$38m total volume on Optimism
- 13,310 transactions
- 881 Bridges
- 13,179 Swaps
- 1285 unique wallet addresses
Pre and post Cumulative tx and Volume #s
OP Rewards Dash
Transaction % per Network
We see a lot of room to improve in the next rounds of incentives. With more than 2/3s of our total OP tokens remaining, we plan to iterate towards an OP incentive program that succeeds at…
- Driving deeper engagement with the Optimism ecosystem
- Onboarding more active Ethereum users to Optimism on Rainbow
- Retaining users in Rainbow
- Generating volume from more users
KPIs we are considering for Season 2:
- TVL on Optimism
- Rainbow MAUs
- Referrals to download Rainbow
- Fiat-to-Crypto transactions in Rainbow
General areas to improve:
- Clarify rules and communications
- People might have gotten confused and thought the leaderboard rewards were paid out per week vs at the end of three week
- People were learning about our swap fees as they were charged for them, some were surprised
- Incentivize more users to participate - be a portal for new and intermediate users to Optimism
- Prioritize volume from many vs a few high-wallet-value users
Rainbow is in the midst of designing Season 2 and plans to announce its plans to OP- Governance in the coming weeks.
We would love to hear the community’s ideas for Round 2. If you have any suggestions for how Rainbow should structure this next round please leave feedback below or email email@example.com.